Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri S.J. Vyas, ... on 7 March, 2011
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : E/1274 of 2010 (Application No. E/S/1141 of 2010) Arising out of : OIA No. 96/2010(Ahd-III)KCG/CE/Commr(A) Dated 04.06.2010 Passed by : For approval and signature : Hon'ble Mrs. Archana Wadhwa, Member (Judicial) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : M/s. Casil Industries Limited Represented by : Shri S.J. Vyas, Advocate Respondent (s) : Commissioner of Central Excise Ahmedabad
Represented by : Shri Rajendra Nagar, SDR CORAM :
Hon'ble Mrs. Archana Wadhwa, Member (Judicial) Date of Hearing : 07.03.2011 Date of Decision : 07.03.2011 ORDER No. _____________ /WZB/AHD/2011 Per : Mrs. Archana Wadhwa;
Out of the total confirmed demand of Rs. 1,43,616/-, the appellants have already deposited an amount of Rs. 35,905/-. By treating the same as sufficient for the purpose of Section 35F, I dispense with the condition of pre-deposit of balance amount of duty and entire amount of penalty and proceed to decide the appeal itself with the consent of both sides.
2. After hearing both the sides, I find the appellants have cleared their final products against CT-3 certificate to another 100% EOU, without payment of duty. As per the appellants, the said goods were re-warehoused at the consignees end. However, as the same were not found fit by the consignee, they rejected the same. Accordingly, the appellants issued credit notes to the consignee.
3. As a result of audit, show cause notice was issued to the appellants alleging that the rejected goods stands received back by them and they have taken the modvat credit in respect of the same. As such, notice sought to deny the credit on the ground that no intimation of receiving back the goods was given to the Revenue and there is no account of the same in the statutory books. The notice relied upon the statement of the appellants representative admitting that such goods were rejected by the consignee and they had taken the modvat credit in respect of the same.
4. However, during adjudication, appellants took a categorical stand that the rejected goods were never received back in their factory and no modvat credit stands availed on the same. They contended that as the goods were not received, the same were not accounted in their statutory books. They also contended that as no duty was paid by them at the time of removal, the question of taking modvat credit does not arise at all.
5. The above contention of the appellants was not accepted by the original adjudicating authority, who going by the fact of admission on the part of appellants representative, confirmed the demand and also imposed penalty. On an appeal against the above order, Commissioner (Appeals) observed that inasmuch as the goods were not actually rewarehoused at the consignees end, the appellant is liable for payment of duty on the goods initially cleared by them without payment of duty. The said order of Commissioner (Appeals) is appealed before the Tribunal.
6. Apart from the fact that the order of Commissioner (Appeals) has traveled beyond the allegations made in the show cause notice and the findings arrived at by the original adjudicating authority, which confirmed the demand by denying the modvat credit, Commissioner (Appeals) has confirmed the demand by holding that the appellant liable to pay duty on initially cleared goods, learned advocate Shri S.J. Vyas has submitted that the finding of the fact that the goods were not rewarehoused is not correct. They have produced the rewarehousing certificate before the authorities and as such, the goods having been rewarehoused, it was the duty of consignee to clear the same on payment of duty, if at all. No duty liability can rest upon them.
7. Apart from the above, learned advocate has submitted that they have not taken the modvat credit in respect of the said goods at all. While fairly agreeing that as per the statement of representative, the said credit admitted to have been taken initially but on verification of their accounts, they found that it was not availed by them at all. He also submits that inasmuch as no duty was paid at the time of original clearance of the goods, the question of availing any credit of duty paid at the time of clearance does not arise.
8. I find that the above issues raised by the learned advocate depend upon the factual verification of the facts. Whether rewarehousing certificates establishing the fact of receipt of goods by the consignee is available or not, is required to be examined. Further, the fact that whether such rejected goods were actually received back by the appellants in their factory is also required to be verified and to be examined by scrutiny of the modvat account maintained by the appellants. For the said purposes, I set-aside the impugned order and remand the matter to original adjudicating authority for fresh decision, after verifying all the above factual aspects. Stay petition as also appeal get disposed off in above manner.
(Dictated and pronounced in the Court) (Archana Wadhwa) Member (Judicial) KL ??
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